Cash for Clunkers buyers remorse?

posted at 1:36 pm on September 7, 2010 by Ed Morrissey

We’ve written numerous times about the Cash for Clunkers program and how it stole demand from future sales, how it artificially increased used-car prices, and how it wasted taxpayer dollars by the billions in unnecessary subsidies while doing nothing for long-term sales. Until now, most have assumed that at least the buyers wound up with good deals and taxpayer-financed satisfaction. The Orange County Register reports that the program recipients may not be as satisfied as people would assume:

Thousands of people who leased cars last year as part of the Cash for Clunkers program are having second thoughts and are trying to get out of their leases, reports LeaseTrader.com. …

“I think it’s Cash for Clunkers remorse,” Sternal says, whose company helps hook up people who want to trade out of their leases with those looking for a lease.

For some, the burden of a long lease has them looking to escape. But it’s not so much the lease as it is the car that lessees bought. Recall that the C4C program required buyers to trade certain classes of gas-guzzlers for more environmentally friendly vehicles. At the time, those cars looked attractive, but a year later, the thrill is definitely gone:

“They woke up last year and saw the Cash for Clunkers program and thought they they could help the environment and the bunnies and the trees and got smaller, environmentally-friendly cars,” Sternal says. “Now they look at that car and think about the really nice car they used to have and think ‘I want something roomier, more luxurious. This contract is bad and I’m not in love.'”

Sternal says the company started getting calls about trading Cash for Clunkers leases in May and now is getting “several hundred” calls a week.

LeaseTrader.com they are getting the most inquiries about Cash for Clunker lease trades from people with Toyota Camrys, Ford Escapes and Honda Accords.

I’m not terribly sympathetic to their plight. The C4C program was a massive waste of money and material, but no one forced people into those choices, either. The Camry and Accord are two perennially popular models, and by all accounts well-built for their class. These lessees rushed to take taxpayer money to fund their new purchases, and should have thought twice about the investment.

Still, this is what happens when the government attempts social engineering in consumer markets. It’s expensive, it creates long-term dissatisfaction, and disrupts commerce.

Update: From commenter Batterup, edited for clarity:

The partakers of C4C weren’t thinking of the bunnies; they were thinking “I am going to get something for free!” Now that they have had the fun of monthly payments on some piece of crap they didn’t want in the first place, they’re upset. Maybe this little experiment will turn some of these children into adults.

Just wait, it gets better. I heard this weekend that the EPA is going to assign and prominently label on new cars a letter grade, based on some environmental criteria. Based on this story above, perhaps there is a segment of our population so stupid that they need government to tell them how to live.

I traded in a 20 year old pickup that wasn’t worth $500.00 and bought a $20,000. car for net $9,500 with the CFC credit and the dealer special. My tax dollars paid for it, so I took advantage holding my nose the whole time.

I sold the car before the first payment was due. If these fools are going to give away my money, I’m not too proud to get in line.

Still, this is what happens when the government attempts social engineering in consumer markets. It’s expensive, it creates long-term dissatisfaction, and disrupts commerce.

What did we expect from a president whose private-sector experience is a job in high school at Baskin-Robbins where he famously gave away ice cream to his friends and spent about nine months in some ill-reported job with some company immediately after Columbia and before entering the community-organizing grievance racket? I don’t count is lame-a** law practice days. They hardly constitute a private practice.

Beyond that, what did we expect from a White House and Cabinet with the least amount of private-sector experience in decades?

“They woke up last year and saw the Cash for Clunkers program and thought they they could help the environment and the bunnies and the trees and got smaller, environmentally-friendly cars,” Sternal says. “Now they look at that car and think about the really nice car they used to have and think ‘I want something roomier, more luxurious. This contract is bad and I’m not in love.’”

BS. The partakers of C4C weren’t thinking of the bunnies they were thinking “I am going to get something for free!” and now that they have had the fun of monthly payments on some piece of crap they didn’t want in the first place they’re upset. Maybe this little experiment will turn some of these children into adults.

We’ve written numerous times about the Cash for Clunkers program and how it stole demand from future sales, how it artificially increased used-car prices, and how it wasted taxpayer dollars by the billions in unnecessary subsidies while doing nothing for long-term sales.

Yeah, but just think about how much less gasoline the country is using now….oh wait…the savings doesn’t even move the needle.

I don’t drive many miles. It does not save me money to trade in my old Camry for a newer better miliage car. Sure, new cars are nice. But I prefer not having to spend the money on them, the initial and yearly taxes on them (California is a high state tax state), the insurance premiums (again much higher than in other areas). So, I really really resent being told that buying a new car will save me money. It won’t. In fact, it will cost me a hell of a lot more money. And it is really a shame that there a less used cars to buy and less used car parts on the market. These aholes never consider the consequences of their actions.

I was actually going to take advantage of C4C with my 1999 Chevy Express van with 200K+ miles on it. It died on the way to the dealership. I ended up selling it for $400 and am actually kind of glad I didn’t end up with a car note.

Many dealers got royally screwed when they found out the buyer had a lien (child support, back taxes, etc… ) on them and the rebate didn’t get to the dealer at all.

I suspect a whole heck of a lot of these people did not count on having a long term car payment either. With hours getting cut back and people losing jobs, Cash for Clunkers looks like a losing proposition for them now.

We had a local lefty publish on a community blog in June 2009 a post titled “Better Every Day!” noting how excited he was about the recession being over (sic) and all the great economic news (sic) coming out each and every Obama-lovin’ day.

There is a dealership near where I live that is advertising “Cash For Clunkers II”. I don’t think it is a real program, but a marketing ploy by the dealership. It’s interesting that they think they will get extra business for their faux CFC ad, but maybe they did well during the original program.

Let’s not forget the hundreds of millions of dollars worth of spare parts that were destroyed and the effect that had on another sector of the car market.

With the time frame alloted to destroy the “clunkers” there was just no time to harvest parts that would normally have been recycled (that’s a good thing right? Recycling?) Perfectly good windows, door skins, fenders, quarter panels, engine parts, wheels, tires, hoods, trunks, interiors…. the list goes on forever. Remember, some of these “clunkers” were only two or three years old.

Just wait, it gets better. I heard this weekend that the EPA is going to assign and prominently label on new cars a letter grade, based on some environmental criteria. Based on this story above, perhaps there is a segment of our population so stupid that they need government to tell them how to live.

Vashta.Nerada on September 7, 2010 at 1:44 PM

Actually that might be helpful. I’d say the Ds and Fs will be the best place to look for a car you’ll be happy with long term.

I’m pretty sure the government doesn’t understand that these days their approval is anything but an inducement to revolt!

First of all, anyone who really believes that the sickening destruction of wealth called “Cash for Clunkers” did anything whatsoever to help the environment is delusional.

I’ve been saying to people ever since the C4C Frankenstein was created that, not long down the road, people will not be able to afford their car payments and all those vehicles will have to be repossessed. That is, unless we have a taxpayer-funded car payment/lease bailout as an October Surprise! (Would anyone put it past our Dear Government to do that?)

With the time frame alloted to destroy the “clunkers” there was just no time to harvest parts that would normally have been recycled (that’s a good thing right? Recycling?) Perfectly good windows, door skins, fenders, quarter panels, engine parts, wheels, tires, hoods, trunks, interiors…. the list goes on forever. Remember, some of these “clunkers” were only two or three years old.

All destroyed in the name of buying votes.

Jim708 on September 7, 2010 at 2:12 PM

My mother in law had a Rendevouz-they don’t make the windshield for it anymore. Woulda cost her $1200 for one & of course here in pheasant country, windshields get replaced a lot.
So bcs of a hail storm, she had to buy a new car, just bcs her windshield was out.
I wonder how many Rendevouzes were part of the C4C?
You bring up a really good point Jim.
People who are poor like me depend upon the used parts market.
Used crap is all I can afford to drive.
I hate our govt.
I just really hate it.

WAIT JUST A FREAKIN’ MINUTE! I smell a rat. A rat that walks and talks like a planted story. I was with ya until the story said that Toyata Camrys, Honda Acords, and Ford Escapes are mostly suffering the buyer’s remorse.

Everything I’ve ever heard about Camrys and Acords are that they are GREAT cars and hold their resale value. I can’t speak for the Escape as I’m not familiar with that model, but every Camry and Acord owner I’ve ever know has absolutely loved their car.

What do these three models have in commom????? None of them were made by Obama Motors. It wouldnt’ surprise me in the least that this story is bogus, or at least exaggerated, to turn people away from reliable, good, cars and point them to Obama Motors.

After all, if this is true, shouldn’t we all be contacting our brokers to buy into Obama Motors upcoming IPO whose shares are being offered at less than a profit? Hmmmm…..?

… Based on this story above, perhaps there is a segment of our population so stupid that they need government to tell them how to live.

Vashta.Nerada on September 7, 2010 at 1:44 PM

They are called serfs.

The old fashioned kind were chained to the land and fell victim of government.

The new fashioned kind are chained to their cars and houses and are victims of government.

Governments love serfs as you can rob them blind and when they try and talk back they get exposed to the minions of government who shut them up via the law.

That is the purpose of the EPA, FDA, HHS, Fannie, Freddie, Sallie, and Ginnie: they are serf-makers. Notice this has been a bi-partisan project over the decades, because Progressives have subverted both parties into thinking government is made to do ‘good’ and be ‘fair’ instead of uphold the law and treat all equally.

I participated in the capitalistic Cash for Clunkers last year. I sold my 1991 Dodge Spirit privately. I had bought it used, drove it for 13 years and put over 170K miles on it myself. It had nearly 200K on it when I got rid of it. Garage kept, minor body and mechanical issues, but I maintained it myself and had records of all maintenance and fuel mileage for several years. The buyer was thrilled to get a nice car cheap. I was thrilled to get anything for the old girl. A year later it is still on the road.

I picked up a 2001 SAAB with 110K miles for pennies on the dollar for what they cost new. I get about 3 mpg better than the Spirit and can now pass everything on the road including the gas pumps.

So the transactions resulted on two happy sellers (myself and the used car dealer where I got the SAAB), two happy buyers, and no government cash. To all my fellow taxpayers out there, You’re Welcome.

With the time frame allotted to destroy the “clunkers” there was just no time to harvest parts that would normally have been recycled (that’s a good thing right? Recycling?)
Jim708 on September 7, 2010 at 2:12 PM

TIME FRAME. The C4C federal employees failed to comply with any time frame reimbursing auto dealers left holding massive debt to the automakers for the sold vehicles.

Cash for Clunkers was a waste of taxpayer dollars, and ruined the used car market in my city. However, calling a new Honda Accord a piece of crap is really pushing it. Those of us middle class people in fly-over country happen to like Hondas and Toyotas, and as someone who bought an Infinity, (considered a luxury car), and a Honda Accord, I’ll take the Honda anyday. It cost less to run, less to repair, got better gas miliage and ran longer before requiring major repairs! It also happened to be a very nice car, and it wasn’t cheap!! We just traded in both of these cars for a new Honda SUV, and got almost as much for the Honda as we did for the Infinity, and it was 5 years older.

Everything I’ve ever heard about Camrys and Acords are that they are GREAT cars and hold their resale value. I can’t speak for the Escape as I’m not familiar with that model, but every Camry and Acord owner I’ve ever know has absolutely loved their car.

My mother has an Escape and I have several friends that own one. I also have a friend who is a service writer at our local Ford dealer. They all sing the praises of the Escape and say if you want a car that never breaks down get an Escape.
I’ve borrowed my mother’s a few times to use on dive trips and as soon as I can I’m going to buy one.

Read the article closer. Most of these people are LEASING. They are paying money to rent cars on a long-term contract.

I cannot remember the movie, but there was a quote that always sticks with me. A sales manager at a car lot is talking strategy with his sales staff. They are talking about working the customer, tickling the price down, adjusting payments down, but when they still cannot commit, “You hit them with the lease option. Screw ’em into the ground. We make more off the leases than with the sale!”

“Just wait, it gets better. I heard this weekend that the EPA is going to assign and prominently label on new cars a letter grade, based on some environmental criteria. . . “.- Vashta.Nerada on September 7, 2010 at 1:44 PM

Those stickers appear to suit the back door introduction to cap/tax – via Shorebank ==> Chicago Climate Exchange and carbon tax credits.
Here is a video clip from Glenn Beck’s program on August 20th which ties some loose ends together.

Shorebank failed Friday and it’s deposits and most of its assets were acquired by a consortium of major U.S. financial institutions and philanthropic groups and will reopen under the name Urban Partnership Bank.

Seeking the names of who are the former first Chicago execs, we find William Farrow, a former banker with First Chicago Corp, will be president and chief executive of UPB and David Vitale, former executive chairman of ShoreBank, will be chairman.”

I suspect a whole heck of a lot of these people did not count on having a long term car payment either. With hours getting cut back and people losing jobs, Cash for Clunkers looks like a losing proposition for them now.
____________________________________________________
Might be true. Gee if I buy a new car will I have car payments???? Must be the fault of those evil bankers, and Wall Street executives, fooling me into buying a car. I just wanted a new car…NOT PAYMENTS??????????????????
Geez?

I know that Toyota Camrys, Honda Accords, and Ford Escapes are great cars, but that’s not the point. The point is that these folks either traded in or sold cars they owned outright in order to put themselves into debt (or according to the article into “rent”).
I’m not surprised at all at the amount of buyer’s remorse and won’t be surprised to see a lot of default happening. Especially in this economy. When C4C all of this was going on, I told my husband to expect to see car loans being defaulted on within 6-8 months. I’m only surprised it took this long.